HB3402 - Relating to risk mitigation planning and associated liability for providers of electric service.

      By: King H.B. No. 3402       A BILL TO BE ENTITLED   AN ACT   relating to risk mitigation planning and associated liability for   providers of electric service.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 36.064, Utilities Code, is amended by   amending Subsections (a) and (b) and by adding Subsections (c-1)   and (h) to read as follows:          (a)  An electric utility may self-insure all or part of :                 (1)   the utility's potential liability or catastrophic   property loss, including windstorm, fire, wildfire, and explosion   losses, that could not have been reasonably anticipated and   included under operating and maintenance expenses ; and                 (2)     potential damages the utility may be liable for   resulting from personal injury or property damages caused by a   wildfire.          (b)  The commission shall approve a self-insurance plan   under this section if the commission finds [ that ]:                (1)  the coverage is in the public interest;                (2)   one of the following:                       (A)   the plan, considering all costs, is a lower   cost alternative to purchasing commercial insurance;                       (B)     commercial insurance alone is insufficient   to cover potential liability, damages, or catastrophic property   loss; or                       (C)     the electric utility cannot obtain   commercial insurance for a reasonable premium ; and                (3)  ratepayers will receive the benefits of the   savings.           (c-1)     In approving a self-insurance plan under this   section, the commission shall prioritize the consideration of the   presence and potential extent of wildfire losses, including:                 (1)  historical data;                 (2)  actuarial studies and analyses; and                 (3)     the possibility of the electric utility's exposure   to losses from multiple types of disasters occurring within the   utility's service territory.           (h)     Subsection (a)(2) does not authorize the electric   utility to self-insure under this section for damages from a   wildfire event the utility caused intentionally, recklessly, or   with gross negligence.          SECTION 2.  Subchapter D, Chapter 38, Utilities Code, is   amended by adding Section 38.080 to read as follows:           Sec.   38.080.     WILDFIRE MITIGATION PLAN; AFFIRMATIVE   DEFENSE. (a) In this section:                 (1)     "Division" means the Texas Division of Emergency   Management.                 (2)     "First responder" has the meaning assigned by   Section 418.251, Government Code.                 (3)     "Plan" means a wildfire mitigation plan described   by Subsection (b).                 (4)     "Wildfire risk area" means an area determined by   the division or an affected electric utility, electric cooperative,   or municipally owned utility, to be at an elevated risk for   wildfire.           (b)     An electric utility or an electric cooperative that owns   a transmission or distribution facility in a wildfire risk area   shall file, and a municipally owned utility or an electric utility   that is also a river authority may file, with the commission a   wildfire mitigation plan that includes the following:                 (1)     a description of each area to which the utility or   cooperative provides transmission or distribution service that is   in a wildfire risk area and the utility's or cooperative's process   for periodically inspecting the utility's or cooperative's   transmission and distribution facilities in those areas;                 (2)     a detailed plan for vegetation management in the   wildfire risk area;                 (3)     a detailed operations plan for reducing the   likelihood of wildfire ignition from the utility's or cooperative's   facilities and for responding to a wildfire;                 (4)     a description of the procedures the utility or   cooperative intends to use to restore the utility's or   cooperative's system during and after a wildfire event, including   contact information for the utility or cooperative that may be used   for coordination with the division and first responders;                 (5)     the utility's or cooperative's community outreach   and public awareness plan regarding wildfire risks and actual   wildfires affecting the utility's or cooperative's service   territory or system, including a specific communications plan for   responding to a wildfire event; and                 (6)  any other information the commission may require.           (c)     The commission shall issue an order not later than the   60th day after a plan is filed with the commission that:                 (1)     approves the plan if the commission finds that   approval is in the public interest; or                 (2)     modifies or rejects the plan as necessary to be   consistent with the public interest.           (d)     Subject to Subsection (e), an electric utility,   municipally owned utility, or electric cooperative for which the   commission has approved a plan is not liable for damages resulting   from a wildfire ignited or propagated by the utility's or   cooperative's facilities or actions unless a court of competent   jurisdiction finds that the utility or cooperative intentionally,   recklessly, or with negligence caused the damage.           (e)     It is an affirmative defense to liability in a civil   action brought against an electric utility, municipally owned   utility, or electric cooperative for personal injury or property   damages caused by a wildfire ignited or propagated by the utility's   or cooperative's facilities if a court of competent jurisdiction   finds that the utility or cooperative was in material compliance   with relevant measures of its approved plan under this section.          SECTION 3.  (a) The Public Utility Commission of Texas shall   adopt any rules as necessary to implement Sections 36.064,   Utilities Code, as amended by this Act, and Section 38.080,   Utilities Code, as added by this Act, not later than the 180th day   after the effective date of this Act.          (b)  An electric utility, municipally owned utility or   electric cooperative may file a wildfire mitigation plan, as   authorized by Section 38.080, Utilities Code, as added by this Act   at any time after the effective date of this Act, regardless of   whether the Public Utility Commission of Texas has adopted any   rules described by Subsection (a) before the date of the filing;   provided, however, that such a plan is still subject to review,   modification, approval, or rejection under Section 38.080(c),   Utilities Code, as added by this Act.          SECTION 4.  Section 38.080, Utilities Code, as added by this   Act, applies only to a cause of action that accrues on or after the   effective date of this Act.          SECTION 5.  This Act takes effect immediately if it receives   a vote of two-thirds of all the members elected to each house, as   provided by Section 39, Article III, Texas Constitution. If this   Act does not receive the vote necessary for immediate effect, this   Act takes effect September 1, 2025.